T4: Changing Quality of Life, 1917-80 Flashcards
(18 cards)
The Economic Impact of the First World War (FWW)
The United States’ entry into the First World War in 1917 led to a rapid increase in production demand, as American industries expanded to support the war effort. However, with the abrupt end of the war in 1918, this heightened demand could not be sustained. As a result, the U.S. economy experienced a sharp but short recession between 1919 and 1921.
Industrialisation and the mechanisation of both farming and industry reduced the need for manual labour, resulting in rising unemployment. This contributed to social unrest, sparking widespread strikes and riots that were emblematic of the First Red Scare.
Furthermore, overproduction—by as much as 50%—led to falling prices and profits, stifling economic growth in the immediate post-war years.
Ford and the Automobile Industry in the 1920s
Many companies adopted new management science principles such as Taylorism and Fordism to enhance efficiency and reduce costs. These methods enabled firms to benefit from economies of scale, with innovations like moving assembly lines and specialised workforces significantly boosting productivity.
Technological advancement and modern production techniques were pioneered by Henry Ford. Ford revolutionised car manufacturing, making cars affordable and accessible to middle-class Americans. The Ford Model T is widely regarded as the first mass-affordable automobile. Its low cost was largely due to Ford’s innovative assembly line system, which replaced individual handcrafting with mass production. The price of a Model T dropped from $780 in 1910 (equivalent to $26,322 in 2024) to just $290 by 1924. At its peak, a Model T could be produced every 10 seconds.
Ford also introduced the unprecedented wage of $5 a day for his workers—well above the industry standard—ensuring they could also afford to purchase the very cars they helped build.
The booming automobile industry stimulated growth in related sectors such as steel, rubber, glass, road construction, motels, petrol stations, and mechanical engineering.
Reasons for the Boom in the 1920s
- Federal Government Policy:
The U.S. government supported business through high tariffs, such as the 1921 Fordney-McCumber Tariff Act, which made imported goods more expensive and encouraged consumers to buy American. The government also pursued policies of deregulation, tax reductions, and laissez-faire economics. This hands-off approach, epitomised by President Coolidge’s remark that “the chief business of the American people is business,” allowed capitalism to flourish largely unchecked. - Advertising and Consumer Culture:
By 1929, companies were spending five times more on advertising than they had before the First World War. This surge in marketing supported a culture of mass consumerism during the Roaring Twenties. The growth of mass media—especially radio and cinema—broadened the reach and impact of advertising campaigns. - Credit and Lending:
By 1929, an estimated $7 billion worth of goods had been purchased on credit. Consumer borrowing became easy, even reckless. Around half of all cars were bought using instalment plans or hire purchase agreements, highlighting how dependent the consumer economy was on credit.
Reasons for the Bust and the Great Depression
- Saturated Consumer Markets:
Industries producing consumer goods such as refrigerators and radios became saturated. By the late 1920s, many Americans who could afford such items had already purchased them. As demand dropped, unsold goods accumulated in warehouses, leading to reduced production and job losses. - The Bull Market and Speculation:
The 1920s saw a ‘bull market’ fuelled by overconfidence, with many believing that banks and businesses were “too big to fail.” This led to widespread, risky speculation in the stock market. When the market crashed in 1929, it triggered a ‘bear market,’ where fear and panic selling caused share prices to plummet. - Weak Banking System:
The U.S. lacked a strong, centralised banking system to regulate loans and maintain currency stability. Around 30,000 independent banks operated across the country, many of which were unable to withstand the economic downturn. In 1931 alone, 3,000 banks collapsed. - Stock Market Speculation and the Wall Street Crash:
Many Americans, often with little financial knowledge, speculated in the stock market by buying on the margin (borrowing money to buy shares). This risky behaviour culminated in the Wall Street Crash of 1929. The ensuing panic led to the failure of many banks—around one-third by 1933—as they too had invested in speculative ventures. Confidence in the banking system evaporated, and the value of people’s savings plummeted—some lost 90% of their money
Impact of the Great Depression and the New Deal
The Great Depression affected all Americans, regardless of class or background. Unemployment reached a devastating 24.9%, with long queues forming outside soup kitchens, breadlines, and job centres as people searched desperately for non-existent work.
Initially, the Republican response was one of inaction. Many believed the economic downturn would resolve itself, as the post–World War I depression of 1919–21 had done. Republican-controlled Congress blocked key proposals from President Hoover, such as the creation of the Reconstruction Finance Corporation and the Emergency Employment Committee, significantly weakening his legislative efforts.
President Roosevelt’s New Deal provided some relief and helped stabilise the nation, but it did not fully end the Depression. Full economic recovery only came with the advent of the Second World War. Nonetheless, several key policies from the New Deal were instrumental in supporting the American people during this period.
The Emergency Banking Act (1933) allowed officials to inspect banks for solvency, permitting only those deemed financially stable (or those needing minor assistance) to reopen, restoring public confidence. The Glass-Steagall Act separated commercial and investment banking to reduce risky speculation, aiming to prevent another financial collapse and restore trust in the stock market.
However, natural disasters also hampered recovery efforts. The Dust Bowl of the 1930s, caused by severe drought in the Great Plains, devastated agriculture. Crop failures, livestock losses, and mass migration further deepened the economic crisis and prolonged high unemployment.
While the New Deal introduced many “alphabet agencies” to promote recovery, aid was often administered unevenly. Programmes such as the Social Security Act excluded agricultural and domestic workers—sectors dominated by Black Americans—on the grounds that their work was too temporary for benefits. Moreover, states administering aid through the Federal Emergency Relief Administration (FERA) often did so in racially discriminatory ways. Recovery was therefore uncertain for both white Americans and minority communities, though the latter faced disproportionate challenges.
In 1937, Roosevelt attempted to curb New Deal spending by cutting the federal budget, leading to a rise in unemployment from 14.3% to 19%—highlighting the fragility of the economic gains made during the New Deal era.
Impact of the Second World War on the American Economy
The war effort, particularly the Cash and Carry and Lend-Lease policies, demanded massive industrial output from the United States to support Allied rearmament. This led to a dramatic increase in production and employment. Soldiers and factory workers alike benefited from rising wages, and U.S. productivity soared by 25% annually.
The United States became a world leader in synthetic rubber, electronics, and telecommunications. Although wartime prices rose by 28%, wages increased by 40%, improving the standard of living for many Americans. Due to rationing and limited consumer goods, along with a strong sense of patriotic duty, Americans saved more than ever before.
By the end of the war, the U.S. had emerged as the world’s dominant economic power. The U.S. dollar became the primary global currency, underpinned by gold reserves following the 1944 Bretton Woods Agreement.
Post-War Affluence (1945–60)
The 1950s were a golden age of economic prosperity in the United States. Americans enjoyed unprecedented levels of disposable income. Around 8 million veterans benefited from the GI Bill, which provided access to higher education, housing, and business opportunities, fuelling entrepreneurship and expanding the middle class.
President Truman adopted a tough stance on labour strikes to maintain productivity, even seizing control of the railways to prevent industrial action. The post-war baby boom further stimulated the economy, creating demand for consumer goods such as toys and nappies, and later necessitating the expansion of schools and universities.
Government spending continued to grow under both Truman’s Fair Deal—which increased social security and the minimum wage—and Eisenhower’s Interstate Highway System, which created jobs and revolutionised American infrastructure.
This period of sustained growth reinforced public belief in the “American way” of life, closely associated with capitalism, anti-communism, and patriotism. Economic success helped solidify the view that America’s political and economic systems were superior, shaping national identity in the early Cold War era.
The Rise of the Suburbs
The post-war period saw the rapid growth of the suburbs, exemplified by the development of Levittowns—mass-produced, specialised homes that were quick, easy, and cheap to build. By 1960, around 33% of Americans were living in suburban areas.
Suburban life was made affordable and convenient due to the widespread availability of cars, shopping malls, consumer goods, and labour-saving household appliances. These developments helped promote a lifestyle centred around domestic comfort and consumerism.
However, suburbia was not accessible to all. Developers like William Levitt refused to sell homes to Black Americans, and discriminatory practices such as redlining enforced residential segregation. These policies prevented many minority families from accessing the economic benefits of suburban home ownership.
The 1960s: The Slow Drift Towards Economic Decline
Though the 1950s were marked by growth, the 1960s signalled the beginning of economic challenges for the United States. A combination of Vietnam War spending, the Space Race, expanding social welfare programmes, and Cold War pressures placed increasing strain on the federal budget.
The U.S. gradually lost its dominance as the world’s top exporter. Nations like Japan, West Germany, and the USSR began competing successfully in manufacturing and technology.
During the 1950s and 1960s, the U.S. shifted from high government spending and budget deficits to low interest rates and an expanded money supply. While this helped pay off debts, it also led to a depletion of U.S. gold reserves and a decline in the value of the dollar. By 1967, the Vietnam War had created a $10 billion deficit, prompting President Johnson to raise taxes. At the same time, inflation and the rising cost of living began to bite, and U.S. gold reserves dropped to just $12.4 billion.
The Challenges of the 1970s
The 1970s introduced a new and troubling economic condition: stagflation—the combination of stagnant economic growth, high inflation, and rising unemployment.
America’s global economic standing declined further. Japan began to dominate in electronics and automobile production, undermining U.S. manufacturing, especially in the Rust Belt. The U.S. began importing more goods than it produced domestically, and by 1981, Japanese companies held 23% of the U.S. car market. Japanese vehicles, which were more fuel-efficient, appealed to Americans during the fuel crises.
One of the most severe economic shocks came from the 1973 OPEC oil embargo, which exposed America’s dependency on imported oil (around 30% of its supply came from the Middle East). The embargo caused the price of oil to quadruple, leading to long queues at fuel stations, widespread fuel shortages, and even energy riots. The U.S., once energy self-sufficient, faced significant economic hardship.
The decline of manufacturing and rise of the service sector (which made up 70% of the economy by the end of the decade) further altered the economic landscape. While the service industry grew, it often provided lower wages and less stability than industrial jobs.
Federal Responses to the 1970s Economic Crisis
President Nixon attempted to stabilise the economy with the Economic Stabilization Act (1970), which gave the federal government the power to control wages, prices, rents, and interest rates. In 1971, he implemented a series of wage and price freezes and abandoned the gold standard, effectively delinking the U.S. dollar from gold to curb inflation and stabilise currency.
The Emergency Employment Act of 1971 aimed to create jobs for returning Vietnam veterans but had limited impact given the scale of unemployment and inflation.
President Ford, who succeeded Nixon, launched the WIN (Whip Inflation Now) campaign, encouraging Americans to cut back on spending and save money. However, the campaign lacked serious economic measures and faced resistance from Congress, who viewed Ford as a “lame duck” president. His inability to address the crisis effectively undermined public confidence.
President Carter pursued austerity measures in an effort to combat inflation. He reduced defence spending and cut back on social welfare, attempting to balance the federal budget. He encouraged Americans to live frugally—famously advising them to “put on a sweater” during the energy crisis. He also adopted personal austerity in the White House as an example.
Carter’s “malaise” speech, intended to address the nation’s crisis of confidence, backfired. It failed to inspire the public, and many Americans, still haunted by memories of the Great Depression, rejected his call to lower their standard of living. His efforts, though earnest, were met with public scepticism and political resistance and were not as warmly received as Roosevelt’s Fireside Chats had been during the 1930s.
Changing Living Standards in America
Standard of living refers to the level of material comfort experienced by an individual, household, or society, often measured by wealth, homeownership, and access to consumer goods such as washing machines or cars. In contrast, quality of life is a more subjective measure, encompassing leisure time, social mobility, and overall well-being.
The concept of the American Dream was closely tied to achieving a certain standard of living, though the specifics shifted over time with social attitudes, technological advancements, and the social group in question.
Living Standards During the 1920s
In the 1920s, many white, middle-class Americans—particularly WASPs (White Anglo-Saxon Protestants)—enjoyed rising living standards, especially in suburban areas. Wages increased, homeownership grew, and the widespread availability of consumer goods and labour-saving devices improved daily life and allowed more leisure time.
By the end of the decade:
⅓ of American homes owned devices like washing machines and vacuum cleaners.
Nearly one in five families owned a car, thanks to the affordability of the Ford Model T, which cost just $295.
However, prosperity was not evenly distributed:
Over 30 million rural Americans lacked access to electricity.
Half of rural homes had no indoor plumbing, and only 10% had piped water.
60% of families earned less than $2,000 per year, struggling to meet basic needs.
Black and Native Americans lived in consistent poverty, excluded from many opportunities, revealing the inaccessibility of the American Dream for minorities.
Much of the 1920s boom was fueled by credit, making it unsustainable—75% of radios and 60% of cars were bought on installment plans.
Living Standards During the Great Depression
The 1930s brought a dramatic decline in living standards as the Great Depression devastated the economy:
Businesses and banks collapsed. Ford, for example, had to fire 75% of his workforce, many of whom were immigrants.
Around 1–2 million people became homeless, living in ‘Hoovervilles’ as they could no longer pay off their debts and mortgages.
Charities were overwhelmed, with limited local and state aid available. Soup kitchens and breadlines became common.
Black Americans were disproportionately affected:
They were 4–6 times more likely to be unemployed than white Americans.
The principle of “last hired, first fired” meant they were the first to lose jobs.
Black women, often employed as domestic servants, were dismissed as white households could no longer afford their services.
Consumer culture declined sharply—popular purchases became Campbell’s soup, cinema tickets, alcohol, and even lottery tickets.
Rising malnutrition and diseases like tuberculosis led people to scavenge through rubbish and desperately search for nonexistent work.
The Impact of FDR’s New Deal on Living Standards
President Franklin D. Roosevelt’s New Deal sought to address the economic crisis and improve living conditions through a series of Alphabet Agencies aimed at providing employment and support.
These agencies, however, often benefited white males the most, particularly in industries hardest hit by the Depression.
The Federal Emergency Relief Administration (FERA) struggled to distribute aid fairly. By 1935, the average family on relief received just $25 per month—far below what was needed.
The Second New Deal excluded domestic workers and agricultural labourers from receiving Social Security. This disproportionately affected Black Americans, as many men worked as sharecroppers and many women worked as maids and cleaners—roles deemed too unstable for inclusion.
Unemployment rates show a mixed picture:
1933: 24.9%
1936: 16.9%
1938: rises again to 19%
1944: drops significantly to 2.1%, largely due to wartime economic mobilisation.
Impact of the Second World War on Living Standards
Industrial demand for the war effort caused unemployment to plummet. The expansion of manufacturing and production created widespread job opportunities.
On the home front, major consumer goods—such as cars—became unavailable for purchase as factories prioritised war production.
Rationing of essential items like beef, butter, and sugar became standard, and pleasure driving was banned to conserve fuel. Living lavishly was considered unpatriotic.
Although consumer goods were limited, many Americans had more money than ever before. The wartime economy turned the U.S. into a nation of savers.
The number of families earning under $2,000 a year fell by 50%, indicating greater income equality and a redistribution of wealth.
Increased disposable income led to higher spending on entertainment, such as cinema trips, and 15.1% of income was spent on eating out. Citizens also invested in the war effort by purchasing war bonds.
Post-War Consumer Boom and Its Impact on Living Standards
After the war, U.S. industry rapidly transitioned to peacetime production, fuelling a consumer boom:
Manufacturers shifted strategies from Ford’s mass production of uniform goods to offering a wide range of consumer products. For example, cars now came in various colours and styles.
The idea of “planned obsolescence” emerged—products were deliberately designed to become outdated, encouraging continuous consumption.
Advertising increased fivefold compared to 1917. With TV ownership reaching 85% by 1960, television became a key medium for promoting consumer culture.
TV introduced innovations like TV dinners, bringing convenience and entertainment into the home.
Companies used “pester power”, marketing directly to children and women, encouraging families to buy more.
From 1939 to 1948, sales of household appliances increased by 500%, contributing to higher living standards and more leisure time.
The rise of the teenage consumer market (worth $10 billion per year) saw teens spending on makeup, fashion, record players, and diner trips.
However, this prosperity had mixed consequences:
Health impacts emerged due to the post-rationing diet. The reintroduction and overconsumption of sugar, fat, and processed foods led to a rise in unhealthy eating habits and obesity.
Popular fast-food and beverage companies thrived—Coca-Cola earned $79 million in 1959, and chains like McDonald’s and Burger King rapidly expanded.
Criticisms of the Consumer Society
Despite the apparent rise in prosperity, several intellectuals criticised the consumer culture:
John Kenneth Galbraith, in The Affluent Society, argued Americans had become grossly materialistic, showing little concern for the underprivileged.
David Riesman feared excessive materialism would undermine traditional American values of hard work and responsible money management.
Lewis Mumford believed consumerism led to standardisation and conformity, eroding individuality.
While spending power increased by an average of 30% during the post-war decade, not all groups prospered equally:
There was a stark contrast between the dynastic wealth of the Rockefellers and the poverty experienced by Black single mothers and Native Americans on reservations.
President Truman’s Fair Deal and the GI Bill helped raise living standards, particularly through access to housing, education, and jobs for returning soldiers.
However, higher living standards did not necessarily equate to better quality of life. Many suburban women felt unfulfilled and constrained, a sentiment famously captured in Betty Friedan’s The Feminine Mystique
